David Cay Johnston is a Pulitzer Prize-winning investigative reporter for the New York Times who specializes in tax policy. He has made a name for himself for his in-depth reporting on shady government deals that involve using public money to benefit the extremely rich.
Johnston's book Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill) was published in 2007. It is an enlightening if disturbing investigation of various government programs that transfer taxpayer money to politically well-connected people. In essence, it reverses the dictum of Robin Hood by stealing money from the poor and middle class and giving it to the already rich and powerful.
Johnston presents several case studies that collectively describe a sinister system, in which the free market ideas of Adam Smith have been replaced by a rigged game. He describes how big-box retailers like Wal-Mart and Cabela's effectively blackmail local governments into giving them massive public subsidies, wickedly forcing their small business competitors to pay taxes to support the very big box stores that are driving them out of business. He describes how municipalities subtly adjust park financing policy to ensure that parks in well-to-do areas are fully-funded and well-maintained, while those in poorer neighborhoods are starved of money and eventually become crime-ridden cesspools. Each chapter lays out yet another boondoggle in which the taxes paid by hard-working American citizens are diverted into the pockets of the already rich and powerful.
One particularly interesting chapter of the book deals with George W. Bush during his business career, before he entered politics. Johnston reveals how he used his father's political and business connections to persuade the city of Arlington, outside of Dallas, to use taxpayer money to finance the construction of a new stadium for the Texas Rangers, after using the power of eminent domain to seize the surrounding property and turn it over to a group of investors he put together. Considering his later calls for small government and low taxes, this episode in Bush's life is ironic, to say the least.
This book should be required reading for anyone who cares about the future of America, and for 21st Century Jeffersonians in particular.
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David Johnson is right. He has proved and illuminated facts that we already knew existed. I’m sure there are many more. There are interesting parallels between David Johnson’s examples and the deals happening in Congress where financial favors go to certain states (Nebraska and Louisiana) – at the expense of everyone else - in exchange for votes from their representatives. How many examples do we need to prove that the system is broken? The issue is - what do we do about it? The problem here is not capitalism – it’s the abuse of power.
In any free society you will always have one end of the financial spectrum asking for rules and decisions to facilitate business and the other end asking for more entitlements. The role of government is to balance the two forces. Government has failed miserablbly. Our representatives have promised unaffordable entitlements to the masses in order to get elected – then used their power to favor special groups (as well as themselves). We have to fix government. Let’s start with election reform and term limits.
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